Before we analyze Freeport-McMoRan’s (FCX) short positions, we’ll discuss a few key terms. Short interest shows the number of shares that have been sold short (SPXS). Exchanges release the short interest every two weeks.
From the short interest, we can derive the short interest ratio—the short interest divided by the average daily traded volume. Short interest and short interest-to-market capitalization basically standardize the short interest. It’s natural that larger, more liquid companies can have high absolute short interest. Therefore, we standardize short interest to the company’s market capitalization or trading volumes.
Short interest rises
According to the latest update, Freeport-McMoRan’s short interest ratio stood at ~4 on August 31, 2016. The ratio increased from the previous update when Freeport-McMoRan’s short interest ratio was 3.8 on August 15. Currently, the company’s short interest ratio is the highest in more than five years.
Bears make a comeback
The current downtrend in Freeport is a welcome break for bears who literally got knocked out in 1H16. Rising risk-on sentiment combined with Freeport’s debt reduction initiatives triggered a sharp upward price action in Freeport. It made things tough for bears who were betting against the company’s revival. Since copper prices have pared most of their 2016 gains, bears seem to sense an opportunity.
Freeport is nearing a crucial technical support level breaching that could provide more impetus to bears. We’ll discuss this more in the next part.
Freeport-McMoRan expects its EBITDA for 2H16 to rise or fall by $325 million for every $0.10 per pound increase or decrease in copper prices.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Kimberly-Clark (KMB) stock has risen 20.5% this year, boosted by the company’s better-than-expected sales and earnings during its last reported quarter. However, its stock could stop climbing. Here's why.